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Broadband s Role in Economic Development

07/26/04. Page - 2. Economic Development. Good highways?Adequate water and sewer lines?Utilities?Railheads/port facilities?Available land at reasonable prices?Skilled work force?Decent tax rates?. 07/26/04. Page - 3. Economic Development. Then Congratulations. In The Economic Development Ga

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Broadband s Role in Economic Development

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    1. Broadband’s Role in Economic Development Doris Kelley Business Development Manager, Black & Veatch 319.235.2095 319.504.9066 mobile kelleydj@bv.com

    2. 07/26/04 Page - 2 Economic Development Good highways? Adequate water and sewer lines? Utilities? Railheads/port facilities? Available land at reasonable prices? Skilled work force? Decent tax rates?

    3. 07/26/04 Page - 3 Economic Development Then Congratulations. In The Economic Development Game… You Lose.

    4. 07/26/04 Page - 4 Satisfying The Speed Need

    5. 07/26/04 Page - 5 Primary Motivations Stimulate Economic Development Create Educational Advantages Enhance Medical Services Gain Competitive Advantage Maintain & Grow Population Base Provide new, valuable services to the community

    6. 07/26/04 Page - 6 Case Study A Case Study on the Economic Benefits a Communication Based Utility Brings to the Community

    7. 07/26/04 Page - 7 Economic Development Factor #1 - Good Highways Interstate Highway: 1-380 Federal and State Highways: U.S.: 20, 63, 218 Iowa: 21, 57, 58

    8. 07/26/04 Page - 8 Economic Development Factor #2 - Adequate Water and Sewer Lines

    9. 07/26/04 Page - 9 Economic Development Factor #3 - Utilities

    10. 07/26/04 Page - 10 Economic Development Factor #4 - Railheads/port facilities Local Motor Carriers: 20 Rail Service: Chicago Central and Pacific Railroad Iowa Northern Railway Union Pacific Railroad Airport: Waterloo Municipal Airport 3 Runways Commercial Carriers Source: Cedar Valley Economic Development Corp

    11. 07/26/04 Page - 11 Economic Development Factor #5 - Available Land at Reasonable Prices

    12. 07/26/04 Page - 12 Economic Development Factor #5 - Available Land at Reasonable Prices

    13. 07/26/04 Page - 13

    14. 07/26/04 Page - 14 Economic Development Factor #5 - Available Land at Reasonable Prices Median Selling Price: 2001 Cedar Falls: $105,000 Waterloo $72,000 Average Home Sale Price: $99,649

    15. 07/26/04 Page - 15 Economic Development Factor #6 - Skilled Work Force Civilian Labor Population

    16. 07/26/04 Page - 16 Economic Development Factor #6 - Skilled Work Force Educational Attainment Levels High School Graduate or Higher 79% Bachelor’s Degree 21%

    17. 07/26/04 Page - 17 Economic Development Factor #7- Decent Tax Rates Waterloo: $41.78 Cedar Falls $36.55 Sales Tax: 7% (State – 5%; Local 2%)

    18. 07/26/04 Page - 18 Telecommunications Services CLEC McLeod USA POPs MCI - Located in Waterloo AT&T- Located in Waterloo Long Distance Carriers MCI AT&T Sprint

    19. 07/26/04 Page - 19 Major Private Employers

    20. 07/26/04 Page - 20 Major Private Employers (Cont.)

    21. 07/26/04 Page - 21 Primary Motivations Stimulate Economic Development Create Educational Advantages Enhance Medical Services Gain Competitive Advantage Maintain & Grow Population Base Provide new, valuable services to the community

    22. 07/26/04 Page - 22 Stimulate Economic Development # of Businesses Cedar Falls Industrial Park & Prairie Technology Park 125 Midport America @ Waterloo Airport 4 Evansdale Technology Park 1 Waterloo North East Industrial Park 5

    23. 07/26/04 Page - 23 Target Corporation Distribution Center Largest sq. ft. Iowa Project in the last 15 Years 1,350,000 sq. ft. $40M Building $60M in M/E 900 Full-time & 200 Part-time Employees $25M Annual Payroll Fun Facts: 33 Acres Under Roof 1 ˝ Miles of Trench Footings, enough Concrete for 25 Miles of 2-lane Highway Building can hold 90,000 Mini Vans

    24. 07/26/04 Page - 24 New Construction Valuation

    25. 07/26/04 Page - 25 Cedar Falls Building Value: $96 Million and Counting $100 Million in New Construction this Fiscal Year is a Distinct Possibility “The Biggest thing During the Year was The Target Distribution Center; That Bumped Us Up Pretty Good.”

    26. 07/26/04 Page - 26 C.F. Building Hits Record $100 Million “Cedar Falls Set a Cedar Valley Construction Record this Fiscal Year, Topping Out at More than $101 Million.” “Despite a Downturn in the National Economy, The City Blew Away all Existing Records in the Fiscal Year Ending June 30.”

    27. 07/26/04 Page - 27 C.F. Building Hits Record $100 Million “…Meanwhile, the city of Waterloo failed to escape the stalled economy. Suffering from declining commercial permits and no large industrial projects to boost the value, the city recorded less than $53 million in construction during the last fiscal year --- its lowest total in eight years.”

    28. 07/26/04 Page - 28 Cedar Falls Growth has been a Mix of Residential, Commercial, Corporate Office, and Industrial Waterloo Growth has been a Mix of Residential (25%) and Commercial/Retail (75%)

    29. 07/26/04 Page - 29 Located Adjacent to the City of Waterloo, Cedar Falls’ Assessed Valuation has Increased at an Average Annual Rate of 7.4% over the Last Five Years, Despite State-Mandated Rollbacks in Residential Property and Machine and Equipment Assessment Rates. Moody’s Expects the Tax Base to Continue Showing Strong Growth due to Ongoing Residential and Industrial Development Projects.

    30. 07/26/04 Page - 30 Competitive Advantages “Fiber Optics is the Key to Waterloo’s Future Growth,” (Mayor) Rooff said. “In Order for Waterloo with its Businesses to Move into the 21st Century, We Need Fiber Optic Capability.” “I Believe it has Hurt Us Economically not to be able to Provide Fiber Optics to Businesses Locating in our City.”

    31. 07/26/04 Page - 31 Competitive Advantages Waterloo Refocuses on Attracting Jobs

    32. 07/26/04 Page - 32 Competitive Advantages Plans for City’s Fiber-Optic System Hits Speed Bump

    33. 07/26/04 Page - 33 Competitive Advantages Qwest to Offer DSL Service in Waterloo

    34. 07/26/04 Page - 34 Competitive Advantages Team Technologies Principal Financial Hawkeye Community Business Center Crystal Distribution

    35. 07/26/04 Page - 35 Educational Advantages Waterloo has 21 Buildings ICN Feeds to ICN Rooms in 3 Buildings – Used for Distance Learning Buildings are Connected to the Administration Building via a Frame Relay. All Buildings, Plus Administration have a T1 Connection Mediacom has Agreed to Connect all 21 Buildings via Fiber School District is Lacking the Capability of Multi Media, Streaming Video in 18 Buildings Fiber Connection will Result in an Annual Savings of Approximately $100,000.00, Plus Costs for Equipment Support

    36. 07/26/04 Page - 36 Educational Advantages Five Major Routes and Five Secondary Routes of Fiber Optic Transmission Line Link the City’s 10 School Buildings, Administrative Center, Central Services and Area Education Agency 7 Internet Service Provided Thru AEA 7 at No Cost AEA 7 has a Fractional DS3 Fiber Connection Eliminates the Need for T1s

    37. 07/26/04 Page - 37 Educational Advantages Cedar Falls Community Schools Received $1 M from the State Of Iowa to Provide Streaming Video On Demand to all School Buildings. All Classrooms will have Access to Distance Learning. Pursuing the Opportunity of Students Accessing Streaming Video via a Home Connection using Cedar Falls’ Community-wide Telecommunications Network.

    38. 07/26/04 Page - 38 Medical Advantages Hospitals Covenant Medical Center Allen Memorial Sartori

    39. 07/26/04 Page - 39 To Increase & Maintain Population

    40. 07/26/04 Page - 40 The Winning Advantage “What’s The Difference?”

    41. 07/26/04 Page - 41 Cedar Falls, Iowa Developed a Municipally Owned and Operated Telecommunications Network Waterloo, Iowa Depended on Existing Providers to Meet Current and Future Needs Needs title? - comparison diagramNeeds title? - comparison diagram

    42. 07/26/04 Page - 42 Telecommunications Services Municipal City-Wide Fiber Optic Network High-speed Fiber Connection Dedicated Connection to the Internet Cable Modems FTTB T1 through DS3 Level Service

    43. 07/26/04 Page - 43 Cedar Falls, Iowa 2003/2004 Data

    44. 07/26/04 Page - 44 Business Growth Cedar Falls Industrial Park & Prairie Technology Park Number of Businesses 140 Number of Employees 4,250 Buildings – Sq. Footage 4.1M

    45. 07/26/04 Page - 45 Major New Business Projects PIPAC Centre On The Lake Hamilton College Performance Bodies Crystal Distribution (expansion) Wingate Inn (under construction) Mudd Video Production Center (Fall 2004)

    46. 07/26/04 Page - 46 Data Center & Carrier Hotel Team Technologies LLC 12,000 Square Foot Data Center and Carrier Hotel Feature World-Class Security Power and Environmental Control Systems Specifically Designed for IT and Telecom Services 50-Mile Fiber Optics MAN Extending the Network to Chicago, Des Moines and Internet National Access Points

    47. 07/26/04 Page - 47 New Construction Value 2003: $80 Million 2004: $92 Million

    48. 07/26/04 Page - 48 Increase in Land Value Increase in Price Per Acre From $35,000 to $50,000 To $35,000 to $70,000 Increase in Property Tax From $36.55 to $36.95 for FY 2005

    49. 07/26/04 Page - 49 Moody’s Investors Service “Moody’s Upgrades to A1 from A2 the Rating on the City of Cedar Falls’ (IA) Sewer Revenue Bonds, Affecting $5.1 Million of Outstanding Parity Debt, Including Current Issue. Sound Financial Operations Providing Ample Liquidity and Favorable Coverage Ratios.”

    50. 07/26/04 Page - 50 Industrial & Technology Park Develop Into a City Within a City “The City of Cedar Falls is Extremely Pleased with our Strong Continued Economic Development Growth that has Exceeded our Expectations. We Continue to Expand our Industrial & Technology Park while Maintaining our Focus on Quality Development and Job Creation,” Said Bob Seymour, Cedar Falls Community Services Manager. “The Cedar Falls Industrial & Technology Park has Basically Developed into a City Within a City.”

    51. 07/26/04 Page - 51 Lasting Effects Commerce Politics Philosophy Art Education

    52. 07/26/04 Page - 52 Information Revolution “(Communities) that Harness its Power and the Opportunities it Presents will Stand Tall as Great Powers and those that do not will Shrink in Every Aspect of Civilization.”

    53. Small Cable System Thrives Shrewsbury Electric and Cable Operations Thomas Josie

    54. 07/26/04 Page - 54

    55. 07/26/04 Page - 55 What We Offer

    56. 07/26/04 Page - 56 Municipal Fiber Network

    57. 07/26/04 Page - 57 Value Added to Community

    58. 07/26/04 Page - 58 Value Added to Community

    59. 07/26/04 Page - 59 Keys to Success Apply business/investment principles Know Your Market – Keep it Local Offer Competitive Services – Technology & Price Integrate with Community – Schools, PEG Access, Local Businesses, Town Government Customer Service – Keep Control! Use Proven Technology

    60. 07/26/04 Page - 60 Vitals

    61. 07/26/04 Page - 61 Vitals - Rates

    62. 07/26/04 Page - 62

    63. Moving The Complex To The Understandable John Reynolds Integrated Architectures

    64. 07/26/04 Page - 64 Thoughts For The Day Subscriber services drive all revenues. Service providers are key to success. Municipal networks’ customers are service providers. Low costs and high volumes are the goal. The success lies in flow-through automation.

    65. 07/26/04 Page - 65 A Subscriber’s Simple Needs Crystal clear telephone calls Crisp video reception that does not blotch Responsive interactive access to the Web Bulk delivery of large content with no disruption of other services

    66. 07/26/04 Page - 66 Sample Services List Voice: Number portability Emergency services Directory assistance Operator assistance Caller ID Data: High speed Internet Variable bandwidth Differentiated services Wireless hotspots w/roaming VPN privacy Security controls Environmental controls Meter reading Video Cable Local Satellite Video on Demand Virtual DVD Personal videoconferencing Radio Streaming channels Music on demand iTunes User-provided services Content Application portal

    67. 07/26/04 Page - 67 Service Providers: Wholesale Partners

    68. 07/26/04 Page - 68 Access Paths to a Subscriber

    69. 07/26/04 Page - 69 Key Network Operator OSS Processes Service Creation Service Provider Acquisition Service Activation Service Registration Service Assurance Billing

    70. 07/26/04 Page - 70 Service Creation

    71. 07/26/04 Page - 71 Service Provider Acquisition

    72. 07/26/04 Page - 72 Service Provisioning and Activation

    73. 07/26/04 Page - 73 Service Registration

    74. 07/26/04 Page - 74 Service Assurance

    75. 07/26/04 Page - 75 Billing

    76. 07/26/04 Page - 76 The Big Picture

    77. 07/26/04 Page - 77 The Larger Context

    78. 07/26/04 Page - 78 Opportunities for Outsourcing Network Operators Technical Assistance Center Flow-through activation Dispatch Wholesale (access) billing Revenue sharing distributions Roaming and settlement Service Providers Full OSS system, or: Customer care Interface to support providers Activation gateway TAC center Retail billing Access mediation gateway Revenue sharing and roaming settlements

    79. 07/26/04 Page - 79 Summary Service provider’s financial viability will be through the delivery of differentiated services. Everyone’s margins depend on automation of the high volume transactions. Network operators will expand their revenues by acquiring an optimal number of service providers. There are many opportunities emerging to reduce costs and complexity through outsourcing selected OSS operations. The systems integration can be somewhat complex, but you don’t have to do it all yourself.

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